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Distributors See Gradual Q2 Growth For CE Retailers


What is the current state of retail as we approach the
second quarter? How are independents, regional retailers and
custom installers doing?

Jeff Kussard, Capitol Sales:

Our dealers seem to
have returned from CES with a real sense of cautious
optimism. They are signifi cantly more optimistic than
they were following last year’s show. If you look at the
product emphasis, there was no reason for any constituency
— regional, big box or [custom] — to question that
things are slowly looking up. I don’t think anybody expected
there to be an immediate turnaround.

Our customers in the installation community are reporting
a great deal of interest in new products geared
toward retrofit installations that are quick and reliable.

Bill Stewart, Petra Industries:

I think all three dealer
types are beginning to stabilize their businesses as we
approach Q2. The key areas for all these groups to remain
successful this year is keeping their inventories in
check, offering great deals to price conscious consumers
and giving those consumers exceptional service.

Stephen Bodnarchuk, M. Rothman and Co.:

remains challenging still. We see channels such as dotcom,
off-price retailers and discount department stores
reporting flat to modest sales increases. Regional retailers
are still repositioning as more and more companies
continue to exit the CE category or close completely.
Custom-install business remains slightly down and
we see this trend continuing for the near term. On the
bright side the retailers that have adapted and repositioned
accordingly are forecasting increases for the back
half. Competition for customers remains fierce.

Fred Towns, New Age Electronics:

The current state of
retail as we approach second quarter is very steady. However,
regional retailers and custom installers are against
some tough competition with the big-box retailers. In order
to differentiate themselves retailers are looking for
more value opportunities such as bundling. Consumers
are more deal-centric than ever and it’s critical that regional
retailers remain creative in there offerings.

Doretta Raffio, ADI

: The first quarter for the custominstallation
market has had a bit of a slow start. Seasonality
and coming off the holidays had an impact, consumer
confi dence was not as strong as it could be, and
consumers seemed to be holding onto their dollars. We
are cautiously optimistic for the second quarter as there
may not be tremendous growth, but we are confi dent that
there will be more opportunity in the custom market.

Mark A. Gustavson, WYNIT:

While inventory levels
in the channel are by no means as overstocked as they
were at this time last year, sell through is a bit soft, affecting
stock purchases for Q2. Independents and regional
retailers continue to seek ways to differentiate
themselves from big box by offering SKUs not available
from the large national retailers and e-tailers. There has
also been a visible advertising trend by independents positioning
their salespeople as knowledgable resources for
consumers as opposed to just “kids in blue shirts.”

Warren Chaiken, Almo:

Our customers continue to
be cautious but optimistic. They are watching the bottom
line while looking for solid growth opportunities.
At the same time, they are confi dent that business will
increase throughout the year as the economy cycles up.

Benjy Goldstein, Fesco Distributors:

Retailers are
regaining ground from past losses. Newer technological
advancements are paving the way for increased sales.
Product convergence is king! The more things work together,
the easier it is to sell a complete solution.

Jeff Davis, D&H Distributing:

We continue to see
strong sales activity across a number of the large-format
retail chains. In addition, independent retailers are actually
showing better growth than retail market conditions.
Smaller entities can be resilient and quick to react
to their local conditions. The custom-installer market
continues to hang on … [and] some are finding ways to